Monday, May 21, 2012

Brownback says tax cuts will help the economy; critics say it will damage Kansas

By SCOTT ROTHSCHILD, The Lawrence Journal-World

Gov. Sam Brownback on Saturday said the tax cut he has vowed to sign will stimulate the economy, but a bi-partisan chorus of critics say it will crater schools, social services and public safety.

"I think we are going to be in good shape," Brownback said.

The measure to reduce personal income tax rates and eliminate taxes on non-wage income to nearly 200,000 businesses would cut $4.5 billion in state revenue over six years. Budget deficits have been projected as early as next year, growing to $2.5 billion in 2018.

The reduction in revenue on a state budget that spends approximately $6.2 billion in tax revenues per year will have devastating consequences, critics of the bill said.

"The fact of the matter is the governor has got his way on the tax discussion, and the state is going to be facing enormous deficits for the next several years," said House Minority Leader Paul Davis, D-Lawrence.

Brownback, a Republican, met briefly with the House Republican caucus to congratulate them on its work during the 2012 session. Brownback said as he was walking to his car Friday evening, a man in front of him yelled, "We need jobs." Brownback said, "This tax bill will create the jobs that he is yelling for."

A group called Traditional Republicans for Common Sense, composed of more than 55 former legislators, called on Brownback to veto the tax bill.

“We support tax cuts and have voted for a number of them over the years, but you have to pay for them and roll them out responsibly," said Rochelle Chronister, a former assistant House majority leader and chair of the Kansas Republican Party. "The governor’s tax plan does neither. Instead, it smacks of Washington-style irresponsible spending that places us on a dangerous path, which will have future generations paying for this mistake," she said.

But Brownback said he believes the Kansas economy is performing well and the state is expecting to get more revenues from gaming and severance taxes.

He compared the proposed tax cuts to Reagan-era tax cuts, which he said produced "20 years of sustained economic growth."

Asked if he wanted the Senate to re-consider a proposal that would phase in the tax cuts over a longer period of time, Brownback said, "If they want to, that's their choice," he said.

Senate Minority Leader Anthony Hensley, D-Topeka, said the tax cuts will ruin the budget. "We are not in the business of bankrupting the state of Kansas, and if he signs that bill that is a fiscal Armageddon."